1. Regulatory Issues and Safety Challenges Presentation to CSG Safety Forum Stephen Matheson Chief Inspector January 2009

2. Overview  Inspectorate update  Statutory positions and their obligations  Other obligations eg SMP availability  Incident Reporting  Investigations – follow up and implementation  Drilling issues  Wells and more wells  Training Competencies  Stilsons Safety Alert  Future Issues

3. Petroleum and Gas Inspectorate  New Chief Inspector  New Inspectors in Cairns, Mackay and Woolloongabba  New Regional Inspector in Woolloongabba  Need to advertise Deputy Chief and Principal Inspector position Brisbane  Look to get additional Inspector positions to deal with expansion

4. Petroleum and Gas Inspectorate  Head Office  Chief Inspector,  2 Deputy Chiefs & Principal Inspector A&I  Manager Licensing & Systems, Executive Assistant  Southern (Woolloongabba)  Regional Inspector - 4 Senior Inspectors, OP Support Officer  Central  Rockhampton - Regional Inspector, Senior Inspector, OP Support Officer  Mackay - Senior Inspector  Northern  Townsville - Regional Inspector, Senior Inspector, OP Support Officer  Cairns - Inspector

5. 5 Industries and the community never a dull moment

6. Statutory Obligations - ESM  Executive Safety Manager (s688)  Appoints operator  Ensures operator makes SMP  Approves plan  Ensures plan is implemented  Gives annual safety report

7. Statutory Obligations - Operator  Operator(s673)  Must be identified in SMP (s675)  Entity or individual  Makes and revises SMP(s674, s678)  Ensures compliance with plan (s677)  Appoints SSM (s692)

8. Statutory Obligations - SSM  Site Safety Manager (s692)  Induction  Ensures people comply with SOPs and emergency response procedures  Ensures people follow SOPs and perform functions safely  First aid & other equipment available on site  Staff trained in first aid and emergency procedures

9. Other Obligations  Notice to Chief Inspector of new plant commissioning/operating (s 673A)  20 Business days  Ensure SMP are accessible (s676)  At the plant (where practical)

10. Incident reporting  Obligation to report prescribed incidents (see s706 of P&G Act, S11 and schedule 2 of P&G Reg)  Lies with operator of operating plant to ensure incident is reported as required  Contractors/tenure operator systems break down  P&G Inspectorate 24/7 emergency contact numbers  0419888575 (Southern) 0418 888575 (Central)  Written reports Gassafe@dme.qld.gov.auGassafe@dme.qld.gov.au

11. Incident investigation/follow up  Opportunity for improvement  S11 of P&G Reg requires underlying cause to be identified  S675 requires SMP to have mechanisms to investigate record and review incidents  S675 SMP must have process for managing change, mechanisms for review SMP.  S678 SMP requires plan to be remade as a result of event  S699 acceptable level of risk  S701 when acceptable level of risk is achieved

12. Incident investigation/follow up summary  Conduct quality and thorough investigations  Learn from incidents especially high potentials  Ensure findings are implemented promptly  Temporary or delayed fixes are not acceptable

13. Drilling – wells and more wells  Significant rise in CSG wells drilled in 07/08 (400 to 600)  Conventional wells decreased (gone back to 05/06 levels)  Meterage increasing  Number of drilling companies operating in Qld has risen from 14 in 2005 to over 20 in 2009  LNG will have dramatic impact on all these numbers

14. Petroleum wells

15. Drilling Competencies  As of 1 January 2009 Competency Standard for drill rig workers is law (s54AA of P&G Reg)  Minimum standard only – s54A (P&G Reg) and s675 (P&G Act) skills assessment, training and supervision requirements apply  Different ways of demonstrating competencies  Mapping with assistant of appropriate assessor required  Audits and inspections will review compliance

16. Drilling – Stilsons  Stilsons are hand tools designed to be used as hand tools.  No evidence that manufacturers endorse their products being cut, welded or attached to a device.  Any modification to a tool has to be reviewed, rigorously engineered and assessed.  Risk analysis must be done to ensure safety is not compromised.  Inspectors will want to see documentation

17. Future issues  More analysis of incident data  New Inspectorate plans to be more visible  Undertaking unannounced inspections (implementation minor audits) of plant especially drill rigs for compliance with SMP  Mandated Rig Inspections (annual?)  Requiring third party audits